Slater & Gordon's enormous write-down means it is almost certain to face a class action from its rival Maurice Blackburn. Photo: Jessica Shapiro

The firm must present an operating plan and restructuring proposal to its lenders in March. The banks have set an April 30 deadline to secure changes to the terms of its existing loans. If no agreement is reached, the banks can demand a full debt repayment by 31 March 2017.

Managing director Andrew Grech whose offer to resign was rejected by the board as the company faces crisis talks with its banks said "the impairment speaks for itself" when asked what could have been done differently in relation to the acquisition.

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"The transaction is disappointing. I want to emphasise its important for us to focus on the future and make the best of the situation."

Slater & Gordon is now "almost certain" to face a class action led by its long-standing rival Maurice Blackburn with thousands of aggrieved shareholders already signed up to the planned action.

Maurice Blackburn's national head of class actions Andrew Watson said the "sheer size and scale of this write-down casts enormous doubt on the adequacy of disclosures made by Slater and Gordon".

Separately, ACA Lawyers, said it had secured two litigation funders for its class action against Slater & Gordon.

"The directors have a lot of explaining to do. It was only in November shareholders and the market were being told the company was in good shape," ACA principal Bruce Clarke said.

Slater & Gordon's shares have plunged by almost 90 per cent in value over a year on concerns about the wisdom of its UK acquisition and doubts about its book-keeping process.

ASIC review

The write-downs come after a near eight-month-long review into the company's book-keeping by the Australian Securities and Investment Commission which the regulator revealed it had completed on Monday.

ASIC will pursue no further action against Slater & Gordon over its accounting issues. It is also understood the regulator is not planning to take action against Slater & Gordon over its disclosure record or any other breaches of the Corporations Act.

The regulator, however, is believed to have left open the door to resuming its investigation into the firm if new information comes to light.

Legal sources were surprised by ASIC's decision to close its investigation into the company's disclosure record which saw Slater & Gordon walk away from its profit guidance in December -- 18 days after reaffirming it for the second time in a month.

In confirming it had dropped the investigation into the company's book-keeping, the regulator said: "ASIC's inquiries mainly concerned the recoverable amount of goodwill attributable to the company's Australian and UK businesses, the recognition of fee revenue and related WIP, provisioning against debtors and disbursement assets, and the basis for classifying WIP and disbursement assets as current assets," it said.

Slater & Gordon chairman John Skippen offered his apology to shareholders for the financial loss they experienced. ​

He said the underperformance of the UK business was of "serious concern to the board and had been a major contributor to the company's tough decision" to write off $876 million.

But he said the due-diligence conducted on the acquisition was thorough and involved 70 lawyers examining 8000 files over 10 weeks.

The limits and risks of the due-dilligence were also disclosed he said including the potential for regulatory change.